The balance of payments is a comprehensive statement of a country’s economic transactions
with the rest of the world for a given period of time—normally a quarter or a year. It is composed
of the current account and the capital account: the current account measures transactions associated
with trade in goods and services, investment income and transfers, while the capital account measures
financial flows such as purchases of bonds and equities or direct investment activities. The balance of
payments should not be confused with the balance of trade, which is a narrower concept that measures only trade in goods and services.